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Ciena's Technology Solutions to Boost Sify's Network Capacity

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Ciena Corporation’s (CIEN - Free Report) converged packet optical solutions has been selected by Sify Technologies Limited (SIFY - Free Report) . Notably, Ciena’s solutions will help Sify meet increasing customer demand apart from offering enhanced support for increasing data volumes, cloud-based services, the Internet of Things (IoT) and Big Data analytics.

The deployment of Ciena’s WaveLogic Ai technology will enable Sify to scale its network capacity from 100G to 400G. Thereby, enabling Sify to provide ultra-high, data-heavy bandwidth services and manage unforeseeable traffic growth for its customers.

Powered by WaveLogic Ai technology, Ciena’s Waveserver Ai and 6500 Packet-Optical Platforms will enable Sify to program its network to adapt to changing service requirements in real time. Moreover, Ciena’s PinPoint software will help Sify in solving potential trouble spots with accuracy apart from minimizing the risk of outages and accelerating repair times from days to hours. The company’s Blue Planet Manage, Control and Plan (MCP) software will also provide Sify with real-time software control.

Existing Business Scenario

Ciena is expected to benefit from rising demand for packet-optical transport and switching products, integrated network and service management software. Additionally, it is increasingly investing in the data and optical fiber market in order to cash in on the tremendous growth opportunity offered by rising bandwidth demand from network service providers. The company is also making efforts to expand its Web Scale IT Architecture in the enterprise market by launching products like new chipsets, metro architecture and mobile backhaul solutions. Ciena’s strong product portfolio is likely to boost its top-line growth over the long run.

Furthermore, Ciena inked a definitive agreement to acquire Packet Design in second-quarter fiscal 2018. This buyout is likely to accelerate Ciena’s software strategy. Also, the acquisition is expected to contribute toward the company’s long-term financial goal of strengthening its Blue Planet and associated services business by approximately 14-16% annually over the next three years. The expansion of Ciena’s Blue Planet software business and network automation capabilities will provide the company with competitive differentiation besides improving its profitability.

In the past six months, shares of this Zacks Rank #3 (Hold) company have rallied 24.6%, outperforming the industry’s 12.2% increase.

Despite these positives, the company faces huge concentration risk as a major portion of its revenues is concentrated among a few large global communications service providers. Further, the company competes with other significant players in the networking industry and has a small share of the market relative to many of its competitors.

Key Picks

Some better-ranked stocks from the same space include Comtech Telecommunications Corp. (CMTL - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) . Both these companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech Telecommunications surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 123.70%.

Motorola Solutions outpaced estimates in the preceding four quarters, with an average earnings surprise of 12.09%.

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